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Capital Accumulation and Growth: A New Look at the Empirical Evidence

  • Steve Bond


    (Nuffield College, Oxford University, UK)

  • Asli Leblebicioglu

    (Boston College)

  • Fabio Schiantarelli

    (Boston College and IZA)

We present evidence that an increase in investment as a share of GDP predicts a higher growth rate of output per worker, not only temporarily, but also in the steady state. These results are found using pooled annual data for a large panel of countries, using pooled data for non- overlapping five-year periods, or allowing for heterogeneity across countries in regression coefficient. They are robust to model specifications and estimation methods. The evidence that investment has a long-run effect on growth rates is consistent with the main implication of certain endogenous growth models, such as the AK model.

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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2004-W08.

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Length: 49 pages
Date of creation: 17 Mar 2004
Date of revision:
Handle: RePEc:nuf:econwp:048
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